Friday, October 19, 2012

Low-risk international payments for your Limo and Taxi business

Limo and Taxi drivers have unique challenges to collect electronic payments. Drivers don't always collect identification or a contact number from their passengers. So if a credit card sale is initially approved, but comes back later with a problem, the driver has no ability to contact the customer to collect another form of payment. That fare becomes a total loss.

A Class Limousine website

A Class Limousine in New York City has been struggling with payments for years. The average fare is low enough that the fees to process credit cards typically run around 4%, in addition to the up-front costs of hardware. In a city with major international travelers, accepting a credit card from a foreign country carries even higher fees, but also much higher risk of fraud.

When travelers arrive in a large city like New York, usually the first thing they need to spend money on is a ride to their hotel or final destination. For international visitors, they must exchange their local currency for US Dollars at a currency exchange, which often comes with a hefty 10% fee.

"Bitcoin is safer than carrying around cash and more reliable than credit card transactions. Our clients don't have to travel with cash on them or exchange their foreign bills at the airport in order to pay us," says John Yerdelenli, owner of A Class Limousine.

International travelers can load bitcoins onto their smartphone, and when they arrive at their destination, they can spend the bitcoins from their smartphone without the costs or hassle of the local currency exchange.

A Class had heard about bitcoins as a low-cost way to collect payments, but until recently bitcoins were limited to running on a computer, which made them impractical for use in a limo or taxi. With the rapid progression of bitcoin wallets for smartphones, bitcoins are much more portable.

Driver presents Bitcoin invoice to the customer

"About 15-20 percent of our sales are international customers" says Yerdelenli.. By accepting bitcoin, he hopes to make it much easier for international travelers to pay for rides.

A Class uses the Limocoin service from BitPay, which allows them to easily create an invoice and accept a bitcoin payment using any smartphone or tablet. The customer scans this invoice and pays from their own smartphone. The typical payment takes about 30 seconds from start to finish.

Yerdelenli also lowers his cost and risk substantially with bitcoin. The processing fees from BitPay are 0.99% with zero risk of fraud, compared to 4% fee and a roughly 2% fraud loss with credit cards.

And, A Class can process a payment from international customers, from any country, for no additional fee.

Yerdelenli continues:

"We accept Bitcoin at A
Class Limousine because Bitcoin transactions are safe, easy, secure,
and speedy. Using Bitcoin,
we don't incur exorbitant fees for processing international credit cards
or run the risk of having charges denied or reversed."